Vittorio Chiesa, 2003 Bioscienze ed economia Vittorio Chiesa Università degli studi di Milano-Bicocca FAST Milano, 14 marzo 2003 Convegno Science Generation

Vittorio Chiesa, 2003

Bioscienze ed economia

Vittorio Chiesa

Università degli studi di Milano-Bicocca

FAST

Milano, 14 marzo 2003

Convegno Science Generation


Index

The healthcare context

The role of biotech

A worldwide overview on biotech industry

The Italian situation


Index


The role of biotech





• Increasing level of competition

• Patent expiration

• Industry performance indicators decline


Inderall®1965

Tagamet®1977

Capoten® 1980

Seldane ®1985

AZT® 1987

Mevacor® 1987

Prozac® 1988

Dillucan® 1990

Recombinate® 1992

Invirase® 1995

Celebrex® 1999

Lopresor® 1975

Zantac®1983

Vasotec® 1985

Hismanial®1989

Videx® 1991

Pravachol® 1991

Zoloft® 1992

Sporanox® 1992

Kogenale® 1993

Norvi® 1996

Vioxx® 1999

Increasing level of competition


Patent expiration

Number of expiring patents 2001 53 2002 41 2003 58 2004 46

Generic products strongly penetrate

(50% of prescription drugs in US)

Revenues decrease by 75% in three months since

outpatenting

40 bln $ of revenues will disappear in the next 5 years


Performance indicators decline

Although R&D expenses grow continuously

1992 1997 2001

11 bln$ 18 bln$ 35 bln$

• New drug approval decreases

• Post-marketing product withdrawals grow

• Sales growth declines

(9% in the ‘90ies vs. 5.3% foreseen in the first decade of the 2000)


The traditional paradigm is over

• Development of blockbusters (at least 1bln$ of revenues)

• General-purpose products

• Aggressive marketing


A new paradigm is required:targeted treatments

• Disease-centric approach to drug discovery

• Cover of secondary care

• Combination of products and services (self-diagnosis, patient training and education, disease management)

• Targeted marketing


The new paradigm means stronger market pressure

• Earlier contacts with regulatory authorities

• Continuous evaluation and stringent reviews

• Shifting balance of power (to MCO)

• Pricing fixed on the basis of medical results


The new paradigm is challenging

• Higher costs of development (clinical trials)

• Lower selling volumes per drug

• Lower price

but

• Higher number of new and more effective drugs


Index


The role of biotech




The new paradigm meansa new approach to R&D

Drug

Discovery

Drug

Development

Production&

Commercialization

Approval

Understanding the disease at molecular

level in drug discovery

Modeling and simulation in drug

development

R&D


The new paradigm means a great opportunity for biotech companies

Drug

Discovery

Drug

Development

Production&

Commercialization

Approval

Enabling technology providers

Big Pharma Midsize Pharma

Big Biotech

Small Biotech


Index


The role of biotech




The biotech industry in US and EU

USA EuropeRevenues 28.500 13.730 Sales 20.700 n.aR&D expenses 15.700 7.480 Profits (Losses) (6.900) (1.520) Number of companies 1.457 1.879 Number of public companies 342 104 Number of employees 191.000 87.182

Data 2001 in millions $


Biotech in Europe

0 50 100 150 200 250 300 350 400

Altri Paesi

Norvegia

Irlanda

Italia

Danimarca

Belgio

Paesi Bassi

Svizzera

Finlandia

Israele

Svezia

Francia

Uk

Germania

Private Companies Public Companies

Number of Companies


Biotech clusters in Europe


What is a cluster

• A cluster is “a geographical concentration of actors in vertical and horizontal relationships, showing a clear tendency of co-operating and of sharing their competences, all involved in a localized infrastructure of support”

• In a cluster co-exist small biotech firms, R&D labs of large firms, universities and research centres, financial institutions, service companies, public support structures


Advantages from clustering

• Sharing of knowledge, competencies and practices

• Availability of skills

• Collaboration

• Support infrastructure


Growth mechanisms of a cluster

Excellent Scientific Base

Generation of Start-ups and

Spin-offs

Establishment of large firm

sites

Reinforcement of relations

between Industry and

Science

Growth of the scientific base

The trigger is facilitating the generation of new science-based companies


How clusters were born

• In US and UK, there were the conditions for the growth of a cluster:– excellent scientific base

– strong enterpreneurial culture

– propensity of finance to risky investments

• In other countries (Germany, France, Scandinavian area) the public support helped create the conditions for the growth of a cluster


Index


The role of biotech




Biotech industry in Italy and Lombardy

LOMBARDY ITALY

Number of biotechfirms(no academicspin-offs)

14 (48,3%) 29

Number ofemployees

532 (71.8%) 735

Average number ofemployees

38 25

Number of publiccompanies

3 3

Number of pharmacompanies(source: Farmindustria)

36 (41.3%) 87

Number of biotechresearchers

614 -


What is missing for a biotech cluster in Lombardy

BiodevelopmentCompanies

Scientific Base

Generation of Start-ups and

Spin-offs

Mission of a Biodevelopment Company

• supporting researchers willing to found a new company• supporting the management of the project• attracting funds• hosting the companies in their embryonic phase

International cases• BiomAG in Munich• Genopole in Evry (France)• Scientific and Technology Park in Heidelberg• Innovation Agencies and University Liaison Offices in Scandinavian countries


What we are doing

• A EU funded project (Cleverbio) to study growth mechanisms and practices of biotech clusters and make a feasibility study for a biodevelopment company

• A project funded by Fondazione Cariplo to build a network of bioincubators (University of Milano-Bicocca, Parco Tecnologico Padano, European Institute for Oncology - IFOM)

Documents

Vittorio Chiesa, 2003 Bioscienze ed economia Vittorio Chiesa Università degli studi di Milano-Bicocca FAST Milano, 14 marzo 2003 Convegno Science Generation